Arlington County Board approves $23 million incentives package for Amazon

Supporters and opponents of Amazon’s plan to bring a second headquarters to Arlington, Va., crowd into a county board room for a meeting where more than 100 people were scheduled to speak. (Sarah Voisin/The Washington Post)

The Arlington County Board unanimously approved a $23 million incentives package for Amazon to build a headquarters facility in Crystal City at a raucous meeting Saturday repeatedly disrupted by protesters who shouted “shame” and twice forced the board members to briefly leave the room.

The 5-0 vote was the final action granting local and state subsidies to the online retail giant as part of its much-publicized plan to create at least 25,000 jobs over 12 years in the Northern Virginia suburb.

The vote came at the end of six hours of testimony and debate in which supporters touted the project’s economic benefits while opponents warned that the influx of highly paid workers would raise housing prices and displace lower-income residents.

The outcome was never really in doubt because board members had signaled for weeks that they intended to back the plan, which surveys showed had broad support.

“It’s the most cost-effective agreement we’ve ever negotiated,” Board Chair Christian Dorsey (D) said. The county expects to reap $14 in new tax revenue for every $1 it spends in subsidies.

Referring to concerns about increased rents, traffic congestion and school overcrowding, Dorsey said, “I am confident we can manage those impacts.”

Despite the solid support on the board, opponents and supporters were evenly divided among speakers in the public hearing before the vote.

The opponents — led by left-wing groups and immigrants’ organizations — stepped up their catcalls and interruptions when Amazon executives began testifying directly to the board after the public hearing. They did not relent even when Dorsey warned that he might have them removed, and their shouting led the board, its staff and the Amazon representatives to leave the room for about 15 minutes shortly after 6 p.m.

The board returned, but the Amazon officials did not.

(Amazon founder and CEO Jeffrey P. Bezos owns The Washington Post.)

Minutes later, the board members left again, for a shorter period, when Chris Otten, an activist from the District, started shouting and swearing and walked to the front of the room where the board was sitting.

Security personnel physically removed Otten as he screamed that he had a broken arm and held him down for several minutes outside the room before dragging him away.

He was later charged with disorderly conduct and trespassing, NBC 4 reported.

In the public hearing, backers argued for the value of the jobs and economic boost they expect Amazon to bring to the county and region.

June O’Connell, a 30-year resident, said Amazon’s presence would ensure that Arlington would get state money for transportation improvements and investments in higher education.

“I want that money from the state,” O’Connell said. “Without Amazon, we wouldn’t get a penny of it.”

Opponents said Amazon didn’t need or deserve public subsidies, that its arrival would displace low-income communities, and that it had not engaged well with the community.

When Kinsey Fabrizio, a member of the Consumer Technology Association, praised Amazon’s outreach to the community, Amazon opponents in the crowd laughed raucously, drawing a rebuke from Dorsey.

Resident Ibby Han told the board that by supporting Amazon, “You’re just repeating Virginia’s history of prioritizing elites over working people.”

Officials from the local chapter of the NAACP and the regional AFL-CIO objected to the unwillingness of the online giant to sign a project labor agreement with wage and benefit safeguards for workers hired to construct the Amazon buildings.

“This request was expressed by virtually every elected official in Northern Virginia,” said Virginia Diamond of the Northern Virginia AFL-CIO.

Before the hearing opened, a couple dozen protesters rallied on the steps of the county building. A smaller number demonstrated in favor of the project.

Because so many people signed up to speak, Dorsey reduced the time allowed per speaker from the normal three minutes for individuals to two minutes and from the normal five minutes for people representing organizations to four minutes.

In the four months since Arlington won a much-publicized, nationwide contest to attract the facility known as HQ2, Arlington residents have been asking questions about its impact on their neighborhoods and community.

People have looked at the county’s five online Q&A sessions 14,000 times, and about 400 attended community events to discuss the provisions in the Amazon agreement. Board members and county staff also met with scores of civic organizations, served on multiple panels and appeared on television, online and in news articles to discuss the deal.

Both Amazon and the real estate company JBG, the main contractor for the project, have met with business groups, school leaders, 50 nonprofit groups and others. However, these sessions have not satisfied critics’ calls for an open public meeting for anyone with questions or criticisms.

Most Arlingtonians, Northern Virginians and residents of the Washington region support Amazon’s arrival, several surveys have found. Business organizations, universities and nonprofit groups came out strongly for the deal.

But a small, vocal group of activists has sought to block the project, saying that the county and commonwealth should not give any incentives to one of the world’s most valuable companies. They also have demanded housing and job protections for existing residents.

These opponents felt empowered after Amazon canceled plans last month to build a headquarters facility in New York City, also with 25,000 jobs. The company withdrew after criticism of the plan from some elected leaders, unions and community activists.

Officials estimate that the Amazon project’s net fiscal impact on Arlington could be worth additional revenue of $162 million over 12 years and $392.5 million over 16 years.

The incentives agreement promises the world’s largest online retailer cash grants estimated at about $23 million if it occupies 6.05 million square feet of office space in Crystal City and Pentagon City through 2035.

The money would come from an expected increase in the hotel, motel and lodging tax paid by visitors; Amazon would get up to 15 percent of that increase, pegged to how much floor space is in active use by the company each year from 2020 to 2035.

Amazon’s offices will be located within an already established special tax district where a portion of the property tax revenue goes toward infrastructure improvements such as parks and wider sidewalks.

The incentive agreement says that half of any new revenue from that district starting in 2021 will go specifically toward improvements around the Amazon buildings for the following 10 years. That grant is worth an estimated $28 million, but the county says it’s not a grant just for Amazon because the improvements will benefit other companies in the immediate area. Amazon will have a chance to express its opinion on how the county uses the money, although the board will make the decision.

The county also offered Amazon the possibility of using its fast, fiber-optic network connection, which would be the subject of a separate agreement if the company chooses to use it.

It’s not yet clear whether Amazon will pay the local business license tax because that tax is levied only on certain types of business, and Amazon has not yet announced which of its business units will be based in Arlington. If the company does pay the license tax, then some of its operations could be eligible for a discount of up to 72 percent under an existing program designed to attract technology companies.

While Arlington pored over the details, the Virginia General Assembly passed and Gov. Ralph Northam (D) signed an incentives package worth up to $750 million for Amazon.